Bitcoin compounding is all about boosting your Bitcoin stash by reinvesting any rewards or yields you earn from both centralized and decentralized platforms back into BTC. Instead of just letting your Bitcoin sit there, compounding makes it work for you, helping you earn more BTC while keeping your initial investment safe. It’s kind of like how you earn interest in a high-yield savings account or reinvest dividends from stocks in traditional finance. But in the Bitcoin world, it’s about smartly using your BTC wherever you can find good yield opportunities and making sure all the rewards you get—regardless of where they come from—are continuously reinvested into Bitcoin.
Understanding about Onchain Bitcoin Compounding
When you deposit Bitcoin into a platform like Acre, it gets sent to various protocols that require Bitcoin liquidity, including layer 1 and 2 networks, decentralized lending services, insurance protocols, and DeFi. These protocols pay for the use of your BTC, and the rewards you earn are automatically reinvested, which helps grow your holdings over time.
The process
- Deposit BTC
- Deploy to Protocols
- Earn and Compound
When you deposit Bitcoin into a platform like Acre, it gets sent to various protocols that require Bitcoin liquidity, including layer 1 and 2 networks, decentralized lending services, insurance protocols, and DeFi. These protocols pay for the use of your BTC, and the rewards you earn are automatically reinvested, which helps grow your holdings over time.